Yeah, thank you. Good morning, everyone, to our Q2 trading update investor and analyst call of Delivery Hero. We trust you have all received the documents in the email this morning, and of course, they are also available on our website. For the call, we will have firstly introductory remarks by Niklas, our Co-Founder and CEO, and then Emmanuel, our CFO, after which we will have time to take your questions. With that, I would like to hand over to Niklas.
Thank you, Daniel. Good morning, everyone, and welcome to our Q2 trading update. We hope you are safe and healthy. The second quarter of 2020 started off a bit rough, as you know, ended above all of our expectations. It was a challenging environment, the full global team did a heroic job, I would like to thank you all for your dedication to our customers, restaurants, and wider community. Thank you, everyone. Before going into the business and financial update, let me reiterate our vision on slide two, as this is really driving what we're striving for each day. We aim to always deliver an amazing experience. This has been and will continue to be the core driver for our activities. We are innovating and developing the business further with the customer's needs in mind.
This has also been the main driver for us when we started with logistics six years ago, same being the case when we look into kitchen concept, POS, payments, supply system, multi-vertical, Dmarts, and many other things. We will keep pushing for improved delivery time, choice, cost, and service until we deliver an amazing experience. We will do this while still making good economics. We will go a little bit more into details on that later. First, let me reiterate and revisit our overall target on slide four, please. As many of you will remember, when we IPO'd our business in 2017, we promised 40% growth in the short and midterm. Looking back on our development since then, I think it's safe to say we delivered on that promise.
Seeing where we stand today and the potential ahead of us, we are very confident that we will also deliver on our second growth target we set at IPO, which was to show a long-term growth of 30%. We are just today delivering another proof point for the strong growth potential we're seeing by increasing our revenue guidance for this year, Emmanuel will talk a little bit more about this in a moment. Secondly, we go for a leadership position in the markets we operate in. To achieve this, our third target is to build tech and product leadership for a third-generation on-demand platform. Finally, you know we are believers in driving profitability through scale and automation. We continue to target a long-term EBITDA margin of 5%-8% of gross merchandise value.
The tremendous growth we are achieving shows that there is great potential for a company with our capabilities out there. As long as we continue to find attractive growth opportunities, we will keep investing to strengthen our position in the countries we operate in. We do so, however, with the promise in mind to deliver also on the long-term profitability target. Slide five gives you an update where we stand regarding not only our global footprint, but also the strength of our position. We are considering ourselves to be rational allocators of capital, and if we are active in markets, we do so in order to take a leadership position there. Today, in more than nine out of 10 countries, we are the number one player, and also weighted by GMV, around 80% of the GMV is steaming from those number one markets.
This does not yet take Woowa Brothers into account. At IPO, I showed a similar graph with seven markets highlighted as distant number two in comparative markets with clear action to resolve. Happy to announce that we have now resolved all these seven markets. In markets we are not yet leaders, we see a clear path to get there and will keep pushing until we are. In some markets, it will take months, and in other places, many years, but eventually we will be there. Overall, more rational behavior is kicking in to many of the markets we operate. If we see this trend persist, then also Delivery Hero will reduce its aggressive push slightly. We continue to be rational consolidators, and it is partially for that reason that we feel well equipped with the proceeds from the convertible bond issuance earlier this month.
With the strength of our business, we would rather push for clear leadership organically than buying competitors out. We also selectively start organically in a handful of markets with clear fit to our geographic footprint. This was the case for the successful launch of Laos, Myanmar, and Cambodia earlier this year and Japan in Q3. We have said earlier in the beginning of the year that we reserve the flexibility of additional investments of up to EUR 200 million for opportunities that we see. Competition has been a bit lighter than expected, we are reducing that now to EUR 150 million, including circa EUR 20 million to EUR 30 million towards launching the Japanese market. Of course, quite importantly, I want to give an update on the situation in Korea and the pending approval for our partnership with Woowa Brothers.
Our confidence in getting the approval in the second half of 2020 is unchanged. The partnership with Woowa will reinforce our position in Asia. We are committed to invest in the Korean ecosystem and make it a tech hub for global services. Delivery will also support Woowa's expansion in new verticals, and new markets. We will share global best practices, innovate together, and create benefits for all stakeholders with more choice, better service, and more advanced technology. Emmanuel will comment on the financials in more details later on. Let me mention some highlights on slide six. Some of those numbers you will already know from the flash update we put out at the very beginning of the month, as there was a huge interest on the market on how our business did in the second quarter dominated by COVID.
As you have seen from the numbers, Delivery Hero did very well. In Q2, we delivered 281 million orders, resulting in order growth of 95% year-on-year. This was despite an initial strong negative impact from COVID. We saw many good investment opportunities during the quarter. We have been doubling down on those, leading to sequential improvements in growth from month to month in both absolute terms and year-on-year growth. This improvement continued in July. Continuing at this pace, 2020 is set to be the first year in which we will total more than one billion orders on our platform. Gross merchandise value in Q2 was up 66% on a constant currency basis to EUR 2.8 billion, and together with Woowa, about EUR 5 billion GMV in Q2. Revenues continued to grow rapidly by 96% for the second quarter on a constant currency basis to EUR 612 million.
Now moving on to our business update and starting with a recap on how we have engaged with our most important stakeholders during COVID-19. What the combination of these measures hopefully shows is that we consider ourselves to be part of an ecosystem and that we acknowledge our responsibility to be a trusted partner, especially in more difficult times. We're confident that these investments have helped the ecosystem and will pay back over time. Slide seven shows some of the examples of how we managed to support local governments and communities. Here, it was not only about donating or delivering a huge number of meals and food to those who needed it, but also by working together with governments more generally. Our customers also benefited from many of our app features to ensure their safety and well-being.
On slide eight shows how we also care a lot for our riders who basically are our brand ambassadors. In addition to many other initiatives, we have set up a EUR 3 million rider financial support program to help those riders who got infected and for that reason could not work. We just decided to prolong that program to at least October. The largest investments went into helping restaurants. In most markets, we've waived onboarding fees to allow restaurants to net off the losses of them losing dining customers. Since restaurants have been operating below capacity, the by far largest contribution we can make to help is not reducing fees, but investing more in initiatives that can drive revenues and put the restaurant at higher capacity utilization. We have used a significant amount of the commission we collect to reinvest in free delivery and promotions.
We have also been pushing pickup and other services to drive more revenue to our restaurants. The crisis is, of course, not over, but so far results have been above expectations. On the next slide, you find a selection of what we have introduced or extended operationally. We have done many things to increase choice significantly, resulting in more than 630,000 restaurants present on our platform at the end of June. We made further advancements in order experience personalization, just being one of them, while also further improving the speed of our deliveries, which is obviously good for customer experience. Also for our economics, resulting in better utilization of our driver fleet. In regards to quick commerce, I have already given an explanation during our last call. Listening to the numerous questions we received on this, I opted to come back on this topic again today.
Slide 11 summarizes the main characteristics of type of commerce on the left-hand side. In short, quick commerce stretches to everything you want to have delivered more or less immediately to your doorstep. This can be anything from convenience items to groceries, to items from local stores. On the right-hand side, you find the GMV that we are doing today in that business and the market potential we see from today's standpoint. This clearly shows that this is already today a very real business, but at the same time, there is still a long runway ahead of us. It might have been a bit confusing, as we've been speaking about quick commerce and instantly afterwards about our offering, which is the Dmarts. Slide 12 illustrates a bit better that there are two pillars of quick commerce. We are actually active in both of them.
In third-party vendors, we act as an agent. We deliver the items from local vendors and get a commission on that. Orders GMV and revenues are captured in the platform business. We are present in 37 markets with a multi-vertical offering with more than 20,000 vendors across groceries, pharmacy, flowers, electronics, and more. On the other hand, with our own Dmarts, we become the principal. Revenues from goods sold are reported in Integrated Verticals together with our still smaller kitchen business. At the end of June, we were present with around 150 Dmarts across 11 countries. Our ambition or our very ambitious target is to operate 400 Dmarts by the end of this year. We provide a customer-focused assortment of up to 3,000 products.
These are mainly top-up grocery products and convenience items that cater to the more short-term needs and impulse purchases ordered both during the day and at night. Very importantly, those products we aim to deliver in less than 15 minutes, from placement of the order until delivery. Both pillars combined show an order growth of 98% quarter-on-quarter to 10.5 million orders in Q2. Much for the concept of Dmarts. Slide 13 shows an overview of the ordering process, and you also get an idea of how a Dmart looks like from the inside. If you want more details, there is a link to a video at the bottom of this slide. Even when looking at this simplified process overview, you can certainly imagine many of the technology components that need to be in place for us to operate this efficiently.
Things such as data science or machine learning for routing optimization, dispatch technology, item selection, warehouse management, and so on. The business also relies on large volume and a large delivery fleet. There have been a lot of questions in regards how the economics work for this business model, and on the next slide we show how it works on a high level. We only show an illustrative view on unit economics on a long-term steady state comparison to own delivery food business. To be clear, we are not yet there on our own delivery food delivery business, and also not for Dmart. For Dmarts, we are currently contribution margin negative overall as we are launching new stores very quickly. We have highlighted before that we aim to reach break even on a store basis after 9-12 months.
Some of the revenue drivers will also rely on global scale, increased purchasing power, high volume in very dense areas. Dmart is a business I would never do if we didn't already have a huge scale from our food business or the logistic capabilities in place. One of the most important metrics for our Dmart is the gross margin we make on the goods sold. Hence, very importantly, and different to the initial expectation that many investors have, we can expect to achieve a margin of slightly below 30%. There are cases of much lower margin, also many with much higher margin. As reflected in the remaining Dmart P&L, the very lean setup benefits from the fact that customers do not come in store, allowing store layout to be more efficient with faster picking, better item selection, better warehouse management, and more opportunity for dynamic pricing.
Some Dmart stores are already profitable today without having pulled most of the additional levers that are shown on the right-hand side. Finally, from a cash flow point of view, given we are able to negotiate more favorable payment terms, which are longer than the turnover time for the product in store, we are also getting to a negative working capital through this part of our operations. On that note, over to you, Emmanuel.
Well, thank you, Niklas. Good morning everyone also from my side, and welcome to the second trading update of 2020. It's a special update for us in many ways. While the first quarter 2020 was only partly hit by COVID-19 and the resulting restrictions, the second quarter already started in that situation and then rather saw an easing of lockdowns and curfews in many countries, but not all. There was an understandable amount of interest from the capital market in how we did in this environment, and wanting to provide an even more timely and transparent view, we therefore provide this flash update early July that you all have probably seen.
We took it also as another positive sign of confidence on the market as we have also been able to place the two tranches of convertible bonds in the middle of July on attractive terms, raising EUR 1.5 billion of capital. We always have been in favor of acting from a position of strength, and with that placement, our financial position has become even more healthy and provides us with the necessary flexibility to react through opportunities when an attractive return present themselves. I will comment on our cash position in a moment, but before that, let's start with our group financials. First, as a reminder, please note that the strategic partnership with Woowa is not reflected in any of the figures until closing of the transaction. As Niklas just said, we expect regulatory approval from the KFTC in H2 2020.
In Q2 2020, we saw a vast majority of governments globally easing the restrictions which were imposed to contain the spread of the COVID-19 pandemic. As previously expected, business activity immediately picked up, and this is especially the case in MENA. As a result, we are pleased to see that order growth kept increasing, reaching a 95% year-on-year growth in Q2 2020 after 92% year-on-year growth in Q1. This particularly shows the resilience of the business and that the strategic investments made in the past years have now really been paying off. The own delivery orders increased to 62% of the total orders in Q2, driven by increased customer demand and also our OD expansion across markets. The GMV reached almost EUR 2.8 billion in Q2, which translates into a 66% increase on constant currency basis. It grew by 58% year-on-year in Q1.
The revenue are growing even a bit stronger than the prior quarter. It increased by 96% year-on-year on a constant currency basis to reach EUR 612 million in Q2 after having grown by 92% year-on-year in Q1. The end of the quarter was significantly better than the beginning. Again, similar to our two previous quarters, our revenue on the group level have been impacted by the application of the IAS 29, the so-called hyperinflation accounting for Argentinian operations. The primary H1 adjusted EBITDA margin stands at -28.4% of revenues and -6.2% of GMV. All segments showed improvement in terms of adjusted EBITDA margin development year-on-year, and Asia and America segment show increased losses in absolute terms due to investments made in this region. MENA, despite the COVID-19 impact, improved its adjusted EBITDA, while Europe was slightly negative after group costs, but profitable before.
You will find more details in our full H1 2020 IFRS report on August 27th. In the light of the ongoing COVID situation, we have updated the detailed overview on the order development on the next slide. As you remember in our last trading update, and this is exactly three months ago, at the end of April, on April 20th, we've shown an order decline of 11% for the group compared to March 11, when COVID was declared as a global pandemic. If you compare this today, you see a market recovery with order numbers of the group now already up +24% compared to that day in March. On the segment level, the impact on Asia was very limited, while Americas had very fast recovery and been trading above its normal level. Both segments also benefit from the fast rollout of our new verticals.
MENA, the segment that was hit hardest from the restrictions, took longest to recover. Some markets are trading above previous levels, while others, and in particular Kuwait, are still not fully out of curfews. Europe is up 12% now. Order growth slowed a bit in the last weeks with the first vacation period kicking in, while year-on-year growth is still on the same elevated levels. Like for America, we expect this to fall back to more normal levels over time. Now let's move on to discuss the performance of each segment shortly, and I would start with our bigger segment, Asia, on slide 18. Asia has continued to be a focus area of growth for us in Q2 2020.
As mentioned in previous trending updates, we clearly see the impact of previous investments to improve our city coverage, the customer experience through faster and more reliable delivery, as well as a greater restaurant selection. As a consequence, we see the order record acceleration to 290% in Q2 2020 to 157 orders generated on the platforms. We are still early stage in Asia, but as we are starting to reach significant size, we should expect the year-on-year growth numbers to decline from these exceptional levels. Asia's GMVs increased substantially by 166% on constant currency to EUR 1.3 billion. Our revenues, which are EUR 218 million for Q2, growing by 234% compared to Q2 2019 on a constant currency basis. The stronger revenue growth compared to GMV was mainly due to the increase of our own delivery orders and now reaching 76% of total orders for the segment.
We are further accelerating the rollout of our own delivery by focusing on customer experience and decreasing delivery times. Now let's move to the next segment, in MENA. In Q2, 67 million orders were generated, representing a negative growth of 6% year-on-year for the reasons already discussed previously. As a reminder, some countries have applied strong curfews that have not been yet fulfilled in some cases yet. Kuwait, an important country for Delivery Hero, entered in the second phase of the reopening plan only by June 30th with limited opening hours in phase III today, now enabling us to deliver until 9:00 P.M. Since mid-March and until the end of Q2, the MENA segment was impacted by the COVID-related restrictions and circa 40 million orders were not generated due to the curfews, in particular in Kuwait, Saudi Arabia, and Turkey.
The resultant total loss of EUR 45 million-EUR 55 million in gross profit was compensated with cost-saving measures such as marketing reduction, resulting in only EUR 30 million-EUR 35 million impact on our EBITDA until June 30th, which is still well within the guidance that we gave of up to EUR 50 million impact that we gave in our last earnings update in April. The GMV grew by 2% year-on-year in Q2 2020 to EUR 822 million on constant currency basis, and this is reflected in the year-on-year revenue growth of 1% on a constant currency to EUR 166 million. Own delivery business keeps expanding and reached now 42% of total orders after 35% in Q1. The next slide is showing the development of our European operations. Our Europe Segment reported stronger growth since IPO.
It generates 31 million orders in Q2, a growth of 47% year-on-year, despite a deeper decline and slower recovery in Southern Europe. Own delivery orders are now at 26% of total orders. Europe GMV grew by 73% to EUR 420 million, while revenues grew by 90% year-on-year on constant currency basis to EUR 76 million. Now finally, Americas on slide 21. Americas generated 27 million orders in Q2, which represents a year-on-year growth of 111% compared to the same period of 2019, this being the sixth consecutive quarter with accelerated growth orders. GMV grew by 85% to EUR 249 million. Revenue were up by 132% on constant currency basis in amount to EUR 57 million. Own delivery orders are now at 71% of total orders after 62 in the last quarter, Q1 2020.
As mentioned before, their revenues as well as GMV for Americas have been impacted by the application of the IAS 29, the hyperinflation accounting for our Argentinian operations. This came into action, if you remember, since September 2018. The impact of considering Argentina as an hyperinflation country was a negative of EUR 2.4 million in Q2 2020 regarding revenues, and a negative EUR 10.7 million in terms of GMV. Finally, let's move to the Integrated Verticals segment on slide 22. As a reminder, the segment captures the activities where we are operating as a principal. Niklas mentioned this before, and where we are in full ownership of Dmarts and the kitchens we operate. Please note that Integrated Verticals orders in GMV are not double-counted, but represented in the regional platform business values. Therefore, these values are only a visual representation.
The rapid expansion of our Dmart business contribute to a significant GMV growth of 109% over Q1 2020. Let's have a look at the development of our cash position on the next slide 23, please. To give you a better overview, we are showing the cash position and the moving parts since the end of last year, 2019. We end the year 2019 with a net cash and liquid assets position of EUR 800 million. In H1 this year, we had a positive effect in the amount of EUR 2.3 billion from the equity raise and the convertible bonds offering in January. Taking into account the negative cash and liquid asset change of circa EUR 500 million in the first six months of the year, we stood at EUR 2.6 billion at the end of June.
In July, as you know, we have placed another convertible bond with two tranche in total amount of EUR 1.5 billion, which brings our net cash and liquid assets position to EUR 4.1 billion, of which EUR 1.7 billion are earmarked for the cash component of the Woowa transaction. That position, as described before, is putting us in a strong position to make sure of attractive opportunity used if attractive opportunities should arise. Now let's move to the next slide and our guidance. On the back of our resilient and strong operative business performance for the first six months of this year, we are increasing our outlook for the full year 2020 revenues for the range of between EUR 2.4 billion-EUR 2.6 billion to the new range of EUR 2.6 billion-EUR 2.8 billion. The outlook for the adjusted EBITDA remains unchanged.
Here we continue to expect an adjusted EBITDA margin of between -14% to -18% as a percentage of revenue. We have stated that this guidance is excluding additional investments of up to EUR 200 million that we intend to utilize to extend our leadership in selected markets where required. So far, we have spent significantly less than half compared to our initial guidance. Consequently, we are changing these numbers downwards, and we are now reserving the flexibility to spend up to EUR 150 million, including EUR 20 million-EUR 30 million for the announced launch in Japan. The COVID-19 related cost will be absorbed in our group guidance, including the negative impact up to EUR 15 million on adjusted EBITDA, expected for the MENA platform business, as I mentioned before, due to the COVID-19 curfews. While we are on group level, we continue to invest, for us, the direction is clear.
The EBITDA margin from here is improving, as we grow in scale and can lever on improving contribution margins. Furthermore, we have proven to deliver a path of profitability for two of our platform segments, Europe and MENA. Europe is expected to reach breakeven in 2020, while the adjusted EBITDA of the MENA segment is expected to be higher in 2020 compared to 2019. That was it from our side, and now we are looking forward to your questions. Thank you.
Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. As a courtesy to the other participants, please limit the number of questions you ask to two at a time. One moment please for the first question. The first question is from Silvia Cuneo, Deutsche Bank. Your line is now open. Please go ahead, ma'am.
Thank you, and good morning, everybody. I have a couple of questions. The first one, about Japan. The launch of the new operations, I would say is a surprise. I mean, you had mentioned the plan to expand in Asia in partnership with Woowa Brothers, but their team is yet to join. Can you please share your thoughts about the market opportunity there, the current competitive landscape, and why you have decided to invest now? Second, the share of own delivery continued to grow rapidly, now at 62% of orders at the group level, of which 37% delivered in less than 20 minutes. Can you please talk about how we should expect these metrics to evolve in the medium term by segment?
How the current group scale and average delivery time compare to what is needed to deliver the steady state unique economics that you shared in slide 14. Thank you.
Hello?
Sorry, being on mute. Hi there, Silvia. Starting off with the Japan launch. It's something that we don't exclude to do with Woowa. We also don't want to wait. We're still waiting for the approval from KFTC, and we see that the Japan market is a big market, but we also see that Uber Eats is pushing very hard in that market, and we don't want to fall behind too much. It would be too hard to catch up then. Therefore, we decided that we launch Japan, and we also are supportive to Woowa Brothers launching in Japan, and potentially we can find then a good way of combining efforts in a later phase. I think the comparative market you asked for a little bit there, and Uber Eats is possibly a leader, but there are also Demae-can and Rakuten.
I think Uber Eats is the one who's clearly taking market shares there and possibly already the largest. In terms of OD, so it has continued to grow, while we have improved economics, making it faster, making it more affordable. The fact that we are faster is an indication of efficiency and the ability to deliver it fast. Actually delivering faster is actually worsening our UTR. If you want to optimize for high UTR, we would actually deliver slower. We would also potentially batch orders. Delivery time and unit economics is not necessarily related. We think that we'll be able to decline both of them, and that's a focus we're having this year, and they will decline in all regions. Both, well, increase the UTR or the number of drops per hour, but also decrease the delivery time.
Exactly how much, I don't want to give out here, but it will be a further decline in delivery times.
Okay, thank you. Maybe just a follow-up to clarify the question on the unit economics. Just wondering if you could share some thoughts about how you are comparing right now at the group level, at least for the own delivery platform business when we look at the steady-state unit economics. Thanks.
Maybe Emmanuel. Yes, please.
Yeah. We saw improvement in own delivery unit economics also in the last quarter. This is true for three segments. I mean, like your Asia, LatAm, and Europe. I mentioned in my presentation the impact on the gross profit for MENA. MENA was affected quite logically after what we saw, the 40 million orders having an impact of EUR 45 million-EUR 55 million on gross profit. That's the only segment where we took a hit due to COVID, clearly, while the other segments are improving the on profit or the OD unit economics quarter- after- quarter and year- after- year, obviously. On that, we're completely on track.
Should add that MENA is a big part of the unit economics. On a group level, it did decline in Q2, but that is not because the three segments actually improved. It was only MENA who declined slightly, but it had an overall larger impact than the positive effect of other markets.
Okay. Very helpful. Thank you.
The next question is from Monique Pollard, Citi. Your line is now open. Please go ahead.
Hello. Morning, everyone. A couple of questions from me, if I can. I was interested in this dynamic delivery pricing that you've now rolled out to 26 markets. Maybe you could talk a bit about what the impact has been and your plans for further rollout into other markets there. The second question was on your cash burn. When I look at the slides from the 1Q and the 2Q on your cash position, it seems that the cash burn reduced from about EUR 300 million in the first quarter to EUR 200 million in the second quarter. Obviously, that's despite the increase in own delivery, the Dmart rollout that you had in 2Q, the losses in MENA. Just wanted to understand a bit better what had driven the reduction in the cash burn quarter-on-quarter.
Cool. I'll cover the first, and then Emmanuel will cover the second. We have seen a very good effect on the initiatives we've done on dynamic pricing. It's not only one thing that we're doing, we're doing a lot of things at the same time. Also area scoping and so on. The team has done a fantastic job. This is a large team, and this has now been rolled out in significant number of markets, and we will roll it out in all markets. Most markets before end of the year. That is happening. Emmanuel on second.
Thank you, Monique, for that question. Maybe to help to explain it, maybe I should give you more details on the bridge. From the EUR 500 million that you see on the slide, the vast majority, circa EUR 300 million, is linked to the negative EBITDA that we are producing for the first six months. There are other positions. There are EUR 44 million linked to a normalization, which basically this is usually due to our transactions that we are doing. There are EUR 86 million linked to our equity investments, and in here, we increased our stake in Glovo. That's the main part of it by far. There is another EUR 79 million on CapEx, of which EUR 58 million is linked to our rent and our premises and so on and so forth.
Due to this normalization and also equity, then it depends when you having this kind of spending or cash out. That's the reason why you have this movement between the two quarter. It's not linked automatically to our EBITDA, which is a large proportion of this EUR 500. As I mentioned, there are also these positions of equity investments and CapEx, and this is basically when our normalization, and it will depend of the time where you take the decision or the cash is going out for this position. That's the reason why you have these differences between two quarters.
Understood. Thank you. Can I just ask a follow-up from the first set of questions? When you said that if you reduce the delivery time, so you deliver faster, that worsens the UTR. Can you explain that?
Yeah, sure. I'll give you a simple example. If the delivery time is, of course, from the time you place the order until you receive the food. That doesn't mean that a delivery rider is engaged the full time here. The delivery guy or rider is only engaged from the time we tell him to go to the restaurant and go to the customer. That means by waiting there, we can build up more volume, and we can even pick someone who's more better located for taking that order. We might also wait a little bit longer to give this rider or let this rider go to the restaurant, making sure that the restaurant is done with the cooking, because a big inefficiency for many of the delivery platforms is that they have to wait for the food while it's being cooked.
Therefore, if you want to optimize your UTR, you wait longer than necessary to making sure that food is cooked, and you wait to allocate a rider until you have someone who's next door to that restaurant. Of course, that makes a very long delivery time, and we optimize for the reduction delivery time. That means we have to work even harder on operations and restaurant compliance and take a little bit of sacrifice there. That hopefully will explain.
Yeah. That makes sense. Thank you very much.
Thanks.
The next question is from Marcus Diebel, JPMorgan. Your line is now open. Please go ahead, sir.
Yeah. Hi, everyone. Niklas, I have one question on these additional investments where you basically guide us now for a lower number of EUR 150 million. Could you elaborate a little bit more why you conclude that this is now the right number? Why you kind of don't see the previous returns anymore for new investments and you become a bit more, let's call it conservative here, which is clearly very helpful. Just a few comments on this would be helpful. The second question is also on Japan and the wider implications. Clearly in Japan, as you said, Uber Eats seems to be very strong. You decided to go. Is that also maybe a playbook now for other markets in Asia where you're not present? Obviously Indonesia is a big market, but also it seems very well-owned.
Would that be something that you also would consider to basically tackle other players more in Asia than you've done in the past? Again, what would that mean for investments? It'd be quite helpful if you can help us squaring that. Thank you.
Thank you very much. Yes. It is, of course, a positive and a negative news that we are not investing the full EUR 200 million. We always want to invest as much as we can at good return. We felt that we had a good plan in place, and we gave some additional room. We don't think that we're able to invest the full amount at the return that we want to. That is, of course, negative. The positive is that, yeah, we'll make a little bit less negative EBITDA. Overall, I think it's negative. Part of this EUR 150 million investment or EUR 200 million initially up to, was also to respond to comparative pressure that we can see in some markets. I think that comparative pressure has been a little bit less than expected.
That's why we also feel comfortable that up to EUR 150 million will be enough to keep on growing our market shares. When it comes to Japan, yes, Uber Eats has a strong position there, and they're building very fast, and it's a good company. We have confidence from being competing to many players in many markets over the last year, I think we have evolved a lot. I think we have been gaining market shares in all markets, and we're confident that we can compete with anyone. We still like to avoid markets which are very-Late stage, very mature. I think in case Japan, we are behind with a couple of years, but I think that we can catch up on. If you speak about market like Indonesia, you have two competitors fighting fiercely, and they are at a much later stage.
This can also speak for not a market where we would necessarily want to go into. I think there's also that many competitive fights, competitive environments that you want to be in at the same time. Right now, it's a little bit less, and I feel like we can take on a market like Japan. Also keep in mind with Woowa Brothers, we also get into Vietnam. I think with that, we think they'll have enough on the plate, and we will focus on those before going into any more large competitive markets for the time being.
Perfect. Thank you.
Thanks.
Ladies and gentlemen, just as a reminder, please limit the number of questions you ask to two at a time, as we have quite a number of people in line waiting to ask their question. The next question is from Sarah Simon , Berenberg your line is now open. Please go ahead.
Yep, morning. Thanks. A couple from me. You mentioned in an interview that you were talking to everybody and that you might consolidate Rappi and Glovo, and obviously you've just told us you've invested a bit more in Glovo. Can you comment on what might be going on there in terms of any conversations you're having or how likely such a thing could be? The second one was on dark kitchens. You haven't really said much about that recently, and you've talked more about Dmart. Should we assume that Dmart's kind of on the front burner and dark kitchens are on the back, or are you sort of busy doing those as well? Thanks.
Thanks. Will try to answer fast given the number of questions. We keep a constant dialogue, and we speak with Rappi and Glovo on a weekly basis. We have a good dialogue. Of course, we're open to any opportunities. At this point in time, I don't think there is an opportunity. Therefore, I would not expect that we are going to acquire or make an offer on either of these companies at this point in time. When it comes to cloud kitchens, it's still a very tough area, and we told you from the start that we are cautiously trying things out, and we don't want to scale something until we really feel comfortable with it. I think we, over the last quarter, done some very good progress here.
I think this is not necessarily on the back burner, but we feel pretty good about things that we have come up with and results that we start seeing. The cost and the investments required for this is going to be less. It's also different in a cloud kitchen if you are the agent or not. It could be that this could be a lighter approach to it, which will not show up in Integrated Verticals, but rather help restaurants and more as a service and as an engine. Yeah, that's it.
Thanks.
Thanks, Sarah.
The next question is from Carole Madjo , Exane BNP Paribas. Your line is now open. Please go ahead.
Yes, good morning. Two quick questions from me, please. First of all, in Asia, I think you mentioned that we should expect lower growth going forward. Is that correct? If so, can you maybe come back on why that's the case and give us any additional color on the trends in H2 in the segment, in the continent? Second question, just quickly on quick commerce as well. I think that GMV seems to be mainly driven by third-party vendors for now. How do you want the split between third-party vendors and DMART to evolve in the future? How should we think about it? Lastly on the same thing, you talked about other revenues in your channel. Can you just maybe give us some detail on what that is in that segment? Thank you.
Perfect. Asia keep on growing fantastically when you look at absolute numbers. If you saw last Q3 last year, we start hitting fantastic growth. It was in Taiwan and many places. Of course, some of these markets grew 3,000% in Q3. Keeping a 3,000% is simply impossible over time. Some other markets have been scaling faster and so on. Overall, we're comparing ourselves to much harder comps. You can expect that sequential growth will be there. On a year-on-year basis, you should expect that it will decline. It can simply not stay on 290% order growth forever. Having said that, I still think it will be very high growth and the traction is still there. Feel very positive about it. When it comes to quick commerce, it's much easier to scale third party.
Here we can quickly get to 20,000 third-party vendors onto our platform in 37 markets. Dmart takes much longer because you need real estate, you need inventory, warehouse management and so on. We have now 150 Dmarts globally. It's 150 versus 20,000. We scale, of course, the Dmarts because it's a different value proposition, and we believe a lot in that, but it takes a little bit longer to scale. We should expect that third party could still be the largest for a very long time. When it comes to other revenue. If you look at Dmart, and I assume you refer to that, you have extra. If you look at the grocery stores, they have certain location in the store, and suppliers have to pay for being in those locations. Similarly, you can do with an app.
You have certain locations for premium placement of certain products. There will also be sampling, that a lot of companies want customers to try certain products. We can easily add sampling products to those items. Those are two specific examples of other revenue that we can drive in this business. Hope that helps.
Thank you.
Thank you.
The next question is from Joe Barnet-Lamb, Credit Suisse, your line is now open. Please go ahead, sir.
Excellent. Thank you, Niklas. Thank you, Emmanuel, for taking the questions. Firstly, you previously stated affordability had bottomed, I think it was in 2Q last year, from memory. Can you give a bit more detail on gross margin and the evolution of affordability and its impact on AOV? Secondly, given you're not investing the full EUR 200 million, does that tell us anything about spending intentions into next year? I'm particularly thinking the early stages of quick commerce. I imagine you could perhaps expand faster there, but maybe there's just a cap on how much you can do at any given time. They'd be my two questions. Thank you.
Yeah, there's less, and there was a little bit extra affordability now during COVID, in particular new restaurants. We got so many new restaurants and merchants on our platform, and you want to give them orders quickly. They also needed orders quickly because it was a pandemic. Therefore, we did some extra promotions, we did some extra free delivery compared to what we normally would do. In general, that has a slight effect on AOV. Overall, the AOV is not dropping. It's more fixed now than what we saw in the past. The difference is that we're growing in markets with slightly lower AOV, so we grow faster than markets like Thailand, Malaysia, Philippines and so on, with lower baskets. Therefore, our average is declining. The profit contribution from this type of market is not worse than anywhere else.
On a percentage base, the profit contribution, they are very similar. If it's a EUR 7 basket or a EUR 30 basket, it's a similar outcome in the end on a percentage basis. The spending for next year, I'll be a little bit careful here because we'll have to see and we have to build a plan. Certain things are hard to scale cost-wise. You mentioned Dmart as an example. It's just a lot of effort and time and people involved to scale those things. The other advantage is that we don't have to buy traffic. While when you look at the food delivery business, we invested hundreds of millions in buying traffic. Now we get hundreds of millions of free traffic, which means that the raw losses to these other verticals that we're building is significantly less going forward. We will keep investing in building leadership.
I hope we find more investment opportunities, but we start coming to a point where we cannot increase those investment opportunities exponentially, but rather marginally, if any.
Thanks very much, Niklas. Appreciate it.
Thanks.
The next question is from Andrew Ross, Barclays. Your line is now open. Please go ahead, sir.
Great. Thanks, good morning, everyone. My first question is within the kind of roughly minus EUR 320 of EBITDA for the first half, could you just quantify how much of that is from a discretionary extra spend and how much of it is underlying? If I look into the second half guidance, in terms of underlying EBITDA, I think it assumes a big step-up from kind of mid-20s to high-20s negative margin in the first half to, I don't know, maybe minus 10% in the second half, depending on what we're assuming for how much discretionary spend was in the first half. It's a big move up in the guidance in the second half. Could you just help us outline what's going to drive that and why you feel so confident it can be achieved? Thank you.
Perfect. I can do the first, and you cover the second, Emmanuel. It's hard to say where it's discretionary spend or not. Compared to when we have a budget and then of course have some extra discretionary spending if we saw the opportunities in competitive environments and so on. Of course, also the budget and our plans have a lot of discretionary spending. I think I said in the past, you could probably take out EUR 400 million-EUR 500 million of marketing spending and still grow the business fairly nicely. Of course, not with 95%, but it can still be a typical good growth for a business also with significantly low spending. We can probably also make easily a 50% more profit contribution per order in our logistic business without hurting the business too much.
Again, doing those two kind of initiatives will not make us win the markets we're operating in. It would also be questioning how much margins can we make in the long run as being a number two player in the market. It's hard to say what is actually discretionary spending, what is not. In order to grow with the pace and winning market leadership the way we do, we require to spend that money we've been spending, including the additional investments that we did. Sorry for not being able to give full detail there, I think the business model is so strong with the cohorts that we could easily make a profit also on a group level any point in time. We choose to grow faster and win more customers because they have a high lifetime value of those customers. Emmanuel to the second.
For this step up, Andrew, that you mentioned from the first half to the second or the second from the first, it's fair to remember that we have a seasonality in our business and Q3 and especially Q4 are usually very strong quarters for us, stronger than the first one. Second, we also reflect in this development the positive evolution that we've seen on our unit economics, but not only. We are combining the seasonality that we usually see in a business anyway, plus the efforts and the evolution that we have. Having said that, it was also like you're taking into consideration COVID-19, so that we expect that now we're going back to a more normal situation, especially in MENA, that impact us in H1. That's the reason behind this step up, as you said.
Very helpful. Thank you.
Thanks. Last question maybe, or last two.
Okay. The last question is from Juergen Kolb, Kepler Cheuvreux. Your line is now open. Please go ahead.
Yeah. Thank you very much. Like I mean, thank you. Two questions. First, on Japan again, assuming that it looks as if in Japan, not a whole lot of restaurants have their own delivery fleet, would it be fair to assume that Japan will be almost exclusively your own delivery business? With that, in this respect, are you planning to enter Tokyo very much at the beginning, or do you try to approach the main city via other areas? Secondly, on delivery overall now in the second quarter, I guess, about 96% of your total order growth stemmed from own delivery. Could you picture a situation where actually the marketplace business could actually decline in terms of orders? Is that something that we've seen in Q2 mainly reflects maybe some COVID-19 impact or so on the marketplace business, how are you seeing that trend evolving going forward?
Thank you.
On the first question, we will launch with own delivery. We think it's a superior user experience when we deliver. We do it fast, we do it more transparently. We do think it is the better way. Marketplace has some other advantages and it can be a little bit cheaper, because there is someone able to somehow making the economics differently than we do. In the case of Japan, we will focus on delivery, and push that. I will not disclose where we enter and how we enter. I'll let that to be a surprise for everyone, including our competitors. When it comes to the OD growth, majority of the growth come from OD, that is partially correct, it's also because we are moving some vendors into OD. It's also that we add more other choice for customers.
Before they only had marketplace restaurants to choose from, now they have a lot of other restaurants to choose from, and some of them actually move over to those restaurants, where we deliver faster. In overall, we have to see the business, how it's growing combined, and then how we move between OD and marketplace is separate. It is not independent of each other. Driving OD faster will make growth of marketplace slower or even negative.
Okay.
Thank you. I wish we had more time to answer the questions, but unfortunately, we're out of time, and I know you're all busy. I'd like to thank all shareholders for your strong support and trust. We will work day and night to remain your trust and keep the trust. We think we are in a fantastic position to build an amazing company over the decade to come. I also like to thank all global team members at Delivery Hero. You have shown an enormous amount of dedication to serve our customers, riders, restaurants, and wider community, and particularly in these challenging times. Thank you very much. Thank you, everyone.
Thank you. Bye for now.
The investor relations team will be available for those questions that we couldn't take. Please feel free to reach out to us during the day. Thank you.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.